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November 10, 2006 3:26 PM PST

Open source earns legal victory

by Anne Broache
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The open source software operations of IBM, Red Hat and Novell need not fear prosecution under antitrust laws, a federal appeals court has ruled.

Plaintiff Daniel Wallace had sued the open source giants, contending that they had conspired with the Free Software Foundation and others to offer their wares at an "unbeatable" price (read: free), thereby squeezing competing alternatives from enterprising software writers like Wallace out of the market. (Wallace, according to court documents, wanted to compete with Linux, "either by offering a derivative work or by writing an operating system from scratch.")

A three-judge panel at the U.S. Court of Appeals for the Seventh Circuit disagreed, upholding an earlier decision by a lower court.

"People willingly pay for quality software even when they can get free (but imperfect) substitutes," the judges wrote in a six-page opinion (click for PDF).

They named Open Office, a suite of word processor, spreadsheet and presentation software designed as an alternative to Microsoft Office, and Gimp, an open-source alternative to Adobe Photoshop, as examples of instances in which proprietary software manufacturers have had no trouble hanging onto the "lion's share" of the market.

The judges went on to knock down--and arguably mock--Wallace's arguments that people who release their software under the GNU General Public License are "conspirators" engaged in "price fixing."

"A 'quick look'," wrote the judges, "is all that's needed to reject Wallace's claim."

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